Agency Banking and Poverty Reduction in Plateau State

Abstract

This study delves into the potential of agency banking to alleviate poverty in Plateau State, a region primarily reliant on agriculture and grappling with a high poverty rate, along with a sizable unbanked population. The research aims to investigate the correlation between agency banking and poverty reduction in Plateau State. Employing a descriptive survey design, the Taro Yamane formula was used to select a sample of 360 participants who were First Bank Plc agents. Quantitative analysis techniques, including descriptive statistics (percentages, mean, and standard deviation) and multiple linear regressions with SPSS 25.0, were employed to test the study's hypotheses. The results of the statistical analysis revealed that the income of agents has a significant impact on poverty reduction. Furthermore, the study found that the transaction volume of agents also significantly contributes to poverty reduction in Plateau State. However, it is important to note that the educational level of agents did not show a significant effect on poverty reduction in the state. As a result, the study recommends that banks operating in Plateau State should seize the opportunity presented by agency banking to reach the rural population, aligning with the Central Bank of Nigeria's (CBN) National Financial Inclusion Strategy (NFIS). This strategy emphasizes targeting women, rural areas, youth, Northern Nigeria, and micro, small, and medium-sized enterprises (MSMEs) to achieve a high level of financial inclusion, ideally reaching a 99% financial inclusion rate by 2030. In addition to promoting agency banking, the study suggests creating awareness of financial literacy in rural areas. This awareness campaign aims to educate the long-standing unbanked population on the benefits of banking services facilitated through agent banking, thereby fostering a more inclusive financial landscape.